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New ICAI norms for bare-all books

New Delhi, Nov. 20: The Institute of Chartered Accountants of India (ICAI) plans to introduce changes in some key accounting standards to usher in more disclosures and transparency in financial reporting.

The institute's accounting standards board has issued the exposure draft of limited revisions to Accounting Standard (AS) 14 pertaining to accounting for amalgamations, AS 20 dealing with earnings per share and AS 25 regarding interim financial reporting.

An ICAI official told The Telegraph that the board has issued the exposure draft and comments have been invited from experts and the public. Based on the comments, the draft will be modified. Final approval will come from the ICAI council before changes in an accounting standard is brought about. At present, there are 29 accounting standards which chartered accountants are required to comply with.

AS 14 requires that where the scheme of amalgamation sanctioned under a statute prescribes the treatment to be given to the reserves of the transferor company after amalgamation, the same should be followed.

Through a limited revision to AS 14, it is proposed to require certain disclosures in the financial statements where the treatment to be given to the reserves prescribed by the scheme is different compared with the requirements of AS 14, which would have been adopted had no treatment been prescribed by the scheme. At present these disclosures are recommended by a general clarification issued by the accounting standards board.

AS 20 requires disclosure of earnings per share, including extraordinary items. By the limited revision to AS 20, it is proposed to require the disclosure of earnings per share, excluding extraordinary items also. It may be noted that at present this disclosure is also recommended by a general clarification issued by the board.

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